Australia to join EU ETS by 2018: Europe must put its house in order before then

Brussels –Today Australia and the EU announced that they have entered into negotiations to create a common carbon trading scheme by 2018. Australia, one of the world's highest per capita emitters of pollutants blamed for causing climate change, will link directly with the European Union's emissions trading system, creating the world’s first full inter-continental linking of emission trading systems.

“This link shows we're on our way to building a more broad-based global carbon regime. But it will reveal the deficiencies in the ETS more than ever: without addressing the lack of scarcity in the market, European policymakers will drag down not just the EU system, but also systems to which we link. They have a responsibility to act quickly and decisively to fix the glaring problem of oversupply."

He continued: “Australia’s economy is the size of Spain's, and could be overwhelmed by a flood of cheap European emission allowances, undermining climate action there. European policy makers need to implement long-lasting solutions swiftly to restore the scarcity of emission allowances in the EU ETS”.

The move means business in Australia will be able to use EU allowances to cover Australian liabilities from July 2015 but European companies will have to wait until 2018 to use Australian allowances.